Pending sales of existing homes dropped last month to their lowest level since December as higher rates discouraged prospective homebuyers and sellers, according to the National Association of Realtors. The NAR’s Pending Home Sales Index fell 2.7% to a reading of 76.5 in May from April, and was down 22.2% from a year earlier.

Elevated mortgage rates have kept would-be homebuyers and sellers on the sidelines, waiting for borrowing costs to come down. That’s left inventory low, and is contributing in part🍬 to a surge in new homebuilding to try and meet demand. 

“Today’s data reading highlights the lack of opportunity that potential homebuyers confront as many homeowners continue to sit on the sidelines, enjoying their homes and below-market mortgage rates,” Realtor Chief Economist Danielle Hale said in a release.

The fall in existing sales came as newly built single-family homes boomed in May, 澳洲幸运5官方开奖结果体彩网:jumping 12.2%. However, ☂new construction likely won’t be💯 enough to fill the gap, according to the NAR.

“It is encouraging that homebuilders have ramped up production, but the supply from new co♑nstruction takes time and remains insufficient,” said NAR Chief Economist Lawrence Yun. “There should be more focus on boosting existing-home inventory with temporary tax incentive measures.”

Contract signings fell alongside sales of existing homes, dropping in all regions except꧋ the Northeast. 

“Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,”🧸 said Yun. “The lack of housing inventory continues to prevent housing demand from being fully realized.”

Regional Breakdown

Broken down by region, the Northeast Pending Home Sales Index (PHSI) rose 12.9% in May from April, but was down 21.9% from May 2022. In the Midwest, the PHSI dropped 5.3% from April and 23.5% from a year ago. The PHSI decreased 4.4% in the South in May, falling 19.6% from the same period in 2022, while in the West, the index fell 6.1% and was down 26.6% year-over-year.